I was a big fan of Imperial Brands (LSE: IMB) in previous years. I liked the brilliant earnings visibility created by the defensive nature of its operations, not to mention the universal popularity of brands like West and Gauloises. Helped by improved investment in marketing, these self-styled Growth Brands continue to gain market share in most of their markets, with aggregated share rising 80 basis points in the year ending September. The strength of these brands is helping the firm overcome the broader demand decline for traditional, combustible products, at least for now.

I was also encouraged by the Footsie company embracing new technologies to generate long-term earnings. Grabbing the headlines is Imperial Brands’ foray into the e-cigarette market through its blu technology, although it has also experimented in other fast-growing areas like caffeine strips. And the company has big plans in 2018 to develop the tech still further

Risks rising

But the relentless attack on so-called Big Tobacco by legislators across the globe encouraged me to sell up. More recently the US Food and Drug Administration has concocted plans to reduce the amount of nicotine in cigarettes to cut addiction, a move which could slash revenues from one of the world’s largest markets. In this environment I am concerned that revenues at Imperial Brands can only defy gravity for so long.

And vaping is now in the headlights too, with everything from restrictions on product sales and marketing through to curbs on public usage also being touted in some markets.

Nonetheless, the City is expecting Imperial Brands to keep its long record of earnings growth going with a 2% rise in fiscal 2018, a projection that creates a dirt-cheap forward P/E ratio of 11.3 times. And this prediction is anticipated to underpin a 188.1p per share dividend, resulting in a monster 6.1% yield.

However, a worsening trading backcloth has seen brokers take the red pen to their earnings forecasts in recent months, and it is not hard to envisage further downgrades coming down the line. Imperial Brands no longer appears the dependable profits generator of yesteryear so I for one will be staying away right now.

Stunning growth on the cards

In fact, I would be much more content to plough my investment cash into Tricorn Group (LSE: TCN) today.

I last lauded the pipe-maker’s investment case in September, and latest bubbly trading details released on Wednesday have reinforced my bullish take. With market conditions on the up, it saw revenues boom 28.4% during the six months to September, to £11.4m, a result that pushed pre-tax profit to £370,000 from £4,000 a year earlier.

And I am confident the vast amounts the company is investing in its global footprint should keep sales tearing higher. The business has already spent a fortune bulking up its presence in the UK, the US and China in recent years.

Unsurprisingly the number crunchers expect earnings expansion at Tricorn to tear ahead of that expected over at Imperial Brands. In the 12 months to March 2018 a 164% bottom-line advance is predicted, and rampant growth is not expected to be a flash in the pan, either, a 53% increase also anticipated for fiscal 2019.

Such forecasts make the AIM-listed business a phenomenal value pick, Tricorn rocking up with a prospective P/E multiple of just 12.1 times and a sub-1 PEG readout of 0.1.

The post Imperial Brands plc isn’t the growth bargain I’d buy today appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

IInvestor appetite for Britain’s pub operators has failed to recover since Greene King’s spooky trading statement in early September

Not only did the business advise of a 1.2% decline in like-for-like sales during the 18 weeks to September 3, but it was hardly bullish over the prospect of an imminent upturn — indeed, the firm commented that it is “cautious about the trading environment and expect[s] the challenges of weaker consumer confidence, increased costs and increasing competition to persist over the near term.”

The news saw the share price of Marston’s (LSE: MARS) extend the downtrend that has seen the firm shed almost a third of its value during the past four months. And the firm sank to its cheapest since mid-2012 just last week.

However, I am convinced this weakness represents a great buying opportunity as the brewer’s long-term investment case remains compelling, and particularly given its ultra-low valuations.

Sure, Marston’s is predicted to endure a slight earnings decline in the year to September 2017. But the company is expected to bounce back with a 6% bottom-line advance in fiscal 2018. Besides, a forward P/E ratio of 7 times for the upcoming period more than reflects the current trading challenges the company faces, in my opinion.

On top of this, the possibility of hulking dividends makes the pub giant worth more than a cursory glance right now — predicted rewards of 7.5p and 7.9p per share for this year and next yield 7.2% and 7.6% respectively.

Whilst sales growth may have slowed more recently, Marston’s has shown a knack of outperforming the broad industry and saw like-for-like revenues expand 0.6% in the 12 weeks to July 22. And with the company also continuing to expand its 1,500+ pub estate, I reckon the future remains pretty rosy for the drinks giant.

Pipe dreams

I also reckon Tricorn (LSE: TCN) is a stock worthy of attention for those seeking excellent growth prospects at low prices.

In the period ending March 2018 the pipe manufacturer is expected to see earnings explode 164% to, or say so City analysts.  And this is not predicted to be a mere flash in the pan, either — an extra 53% improvement is forecast for fiscal 2019.

As a result Tricorn trades on mega-low multiples. Not only does the share change hands on an undemanding forward P/E rating of 12.1 times, but it also carries a sub-1 PEG multiple of 0.1.

Given the company’s strong sales momentum, some could say that the firm is an appetising pick at these prices. It saw revenues rise 3% in the last fiscal period, a result that saw profits beat all prior expectations — Tricorn booked pre-tax profits of £230m in the year versus the previous year’s £270m loss.

The company has restructured its Chinese manufacturing processes to more effectively meet the needs of its Asian clients, but this is not the only story as revenues also continue to sail higher in the UK and the US. I reckon Tricorn’s pan-global progress could make it one to check out right now.

The post 2 cheap stocks you can buy today appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

AstraZeneca

Pharmaceuticals giant AstraZeneca (LSE: AZN) attracted the headlines in midweek trade following news it had shorn off its Caprelsa drug to Genzyme. The medicine — which is used to treat rare diseases — has been sold for an initial $165m, and additional payments worth a potential $135m have been written into the deal pending certain development and sales milestones.

 AstraZeneca says that the deal boldens its “strategic focus on its three main therapy areas,” namely oncology; cardiovascular and metabolic diseases; and respiratory, inflammation and autoimmunity. And I for one am convinced these segments should deliver blockbuster returns in the years ahead, boosted by a bubbly product pipeline and thrusting demand from emerging markets. Consequently I reckon a forward P/E multiple of just 15.2 times is great value.

Premier Oil

Fossil fuel leviathan Premier Oil (LSE: PMO) has made much of the running in Wednesday’s session, extending the terrific performance of the mining and energy sectors over the past week. The business was last 10.1% higher on the day, thanks to Brent prices bumping back above $50 per barrel. But I believe this recent resurgence will prove a short-lived phenomenon as the oil market remains on shaky ground.

Indeed, the IMF’s downgraded growth forecasts of just 3.1% in 2015 revealed yesterday are just above the level that suggests a global economic downturn could be in the offing. Premier Oil revealed last month that production has averaged 57,100 barrels per day so far in 2015, above its full-year guidance of 55,000 barrels. But while this is of course positive news, I believe the likelihood of oil prices sinking to fresh multi-year lows still makes the producer a poor stock choice.

John Wood Group

Thanks to the aforementioned concerns over the oil market, I believe services provider John Wood (LSE: WG) remains an equally unattractive investment destination. Still, shares prices ticked marginally higher in Wednesday trading after the firm announced it had secured a multi-million dollar contract with hardware supplier Bechtel to supply an automated engineering system for Tengizchevroil’s crude storage capacity project in Kazakhstan.

While such contracts are of course cause for celebration, it does not distract from the wider malaise affecting the oil industry, with global supply continuing to ratchet higher and keeping inventories at bursting point. John Wood is expected to endure a 20% bottom-line slip in 2015 as fossil fuel producers slash their capex budgets, and I do not expect earnings to move back in the right direction any time soon.

Tricorn Group

Engineering play Tricorn (LSE: TCN) was recently flat from Tuesday’s close following the release of a mixed trading update. The company — which manufactures pipes for a wide variety of industries — advised that revenues for the period ending April-September are expected to be 5% lower from a year earlier, as lower demand from the UK Transportation offsets rising sales in the US and China.

Still, Tricorn anticipates adjusted pre-tax profit to be “substantially ahead” of levels seen in the same 2014 period. I believe investors should exercise caution before ploughing into the firm, however, given concerns over current demand. With the firm’s Energy arm also leaving it exposed to the mining, oil and gas sectors — sales at this division dipped 3% in the first half — I believe a forward P/E rating of 21.2 times could be considered a tad heady at the current time.

The post Should You Buy AstraZeneca plc, Premier Oil PLC, John Wood Group PLC And Tricorn Group plc? appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.